The Australian dollar is trading at .7540 cents level this morning after the Reserve Bank of Australia (RBA) decided to hold on current interest rates yesterday.
“After the RBA governor was as neutral as I’ve read him for some time in his post-board meeting statement yesterday, there was nothing to restrain the bulls from taking Aussie dollar higher,” said Greg McKenna, chief market strategist at CFD and FX provider AxiTrader.
However, McKenna pointed out that the current trendline for the Aussie dollar is showing a downtrend channel.
“Depending on some external factors like the US Federal Reserve statement this week, the Aussie dollar could re-test the downtrend resistance level,” McKenna said.
The Aussie is at 0.7540 or just 10 points or so below the top of this channel today.
“Fundamentally there are few drivers for the Aussie today,” McKenna noted.
The release of a solid AIG services PMI of 53 (51.7 last) is positive.
“But it is really the release of ADP employment and the statement and decision from the US Federal Reserve tonight which will be the key drivers as we wait for non-farm payrolls on Friday night,” he added.
As it stands the daily charts suggest prices will test higher levels. If this downtrend breaks a run to 0.7580 and perhaps 76 cents level looks likely, according to McKenna.
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